Zen International International Stocks-(Indices Defy Analysts Calls)

Zen International: No let up in irrational exuberance as investors chase values higher.

Obvious disparity between the condition of the real economy and current equity values are not instilling caution among late arrivals to the rally in global equities. That’s the view from sources close to Asian-based investment boutique, “Zen International”. Despite bearish sentiment and predictions from many analysts, equity values continue to rise fueled, ostensibly, by better-than-expected third-quarter corporate earnings reports. “Zen International” analysts suggest that even general consensus that acknowledges that profits are more a result of cost-cutting than increases in revenue is not dampening enthusiasm for equities despite the fact that US and European indices continue to trade at their highs. Many commentators believe that the value of the US dollar is also playing a significant part in the current scenario. Some believe that significant moves in equities are tightly correlated with the value of the world’s reserve currency which continues to reflect the policy of benign neglect being pursued by the Obama administration. “Zen International” is thought to believe that the next rally in the dollar could see the air taken out of the equity markets in dramatic fashion and advises clients to keep their powder dry in anticipation of the inevitable correction. While the firm does not expect a return to the March lows for equities, it does believe that a retrenchment in the order of 10-20% is possible.